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2026 Supreme(Bom) 59

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
JITENDRA JAIN, J.
Shakuntala Tilakdhari Gupta – Appellants
Versus
Shri Jawaharlal R. Gupta – Respondents
First Appeal No.1628 of 2012
Decided On : 18-02-2026

Advocates appeared:
Mrs. Varsha Nichani a/w Mr. Roshil Nichani for the appellants.
Mr. Sanjay Krishnan i/by Leges Consultus for respondent no.2.

A temporary employment relationship can be established under the Employees’ Compensation Act without a formal contract, relying on circumstantial evidence and admissions.

Headnote:(A) Employees’ Compensation Act, 1923 - Sections 2(dd), 2(e) - First appeal challenging Labour Commissioner's order rejecting compensation on grounds of non-establishment of employer-employee relationship - Appeal allowed based on evidential support from FIR affirming employer-employee relationship despite temporary hiring of driver. (Paras 1, 5, 15, 26)

(B) Employer-Employee Relationship - Evaluation based on circumstantial evidence, including oral agreements and admissions in FIR - The reliance on strict written contracts is unnecessary for establishing such a relationship under the Act. (Paras 10, 12, 19)

Facts of the case:
The deceased, a driver, met with an accident while driving a vehicle owned by opponent no.1, who contended that he hired the deceased for a short duration for a trip, but failed to establish a formal employer-employee relationship, leading to the rejection of compensation claims by the Labour Commissioner.

Findings of Court:
The court found that the deceased was indeed an employee under the definition extended by the Act, despite the lack of formal documentation establishing an employment contract, reinforcing the broad interpretation of 'employment.'

Issues: Whether the Labour Commissioner was justified in rejecting the application for compensation on the grounds that the employer-employee relationship was not established.

Ratio Decidendi: The court determined that temporary employment can still constitute an employer-employee relationship under the Act, emphasizing the significance of circumstantial evidence and admissions over formal agreements.

Result: Appeal allowed.

Table of Content
1. establishment of employer-employee relationship. (Para 3 , 4 , 10)
2. arguments regarding hiring and liability. (Para 5 , 6 , 7)
3. interpretation of employer and employee definitions. (Para 9 , 16 , 19)
4. precedents supporting employer-employee relationship definition. (Para 23 , 24)
5. judgment outcome and instructions for compensation calculation. (Para 25 , 26)

JUDGMENT :-

JITENDRA JAIN, J.

1. This first appeal under Section 30 of the Employees’ Compensation Act, 1923 was admitted on 28 February 2017, challenging the order dated 9 May 2012 passed by the Labour Commissioner, but no substantial question of law was framed at the time of admission. Therefore, the said question is now framed at the time of final hearing and which reads as under :- “Whether the Labour Commissioner was justified in rejecting the application for compensation on the ground that the relationship between the deceased and the opponent no.1 of employer-employee was not established ?”

2. The appellants had served opponent no.1 through paper publication since other modes failed.

Brief Facts :-

3. As per the applicants, the deceased was working as driver for two months (short duration). It is not in dispute that on the date of accident i.e., 29 March 2009, the deceased was driving vehicle no.MH 04 BH 6522 belonging to the original opponent no.1. The deceased lost his life in the accident while driving the said vehicle and other passengers including opponent no.1 suffered injuries. It was the case of opponent no.1 before the police authorities that for attending funeral of his brother, he had to leave for Rajasthan alongwith his other family members and the deceased was driving the vehicle which met with the accident.

4. The dependents of the deceased issued legal notice to opponent no.1 for compensation which was not replied and, therefore, an application under the Employees' Compensation Act came to be filed which was rejected by the impugned order dated 9 May 2012 on the ground that the applicants have failed to prove employer-employee relationship. It is on this background that present appeal came to be instituted which got admitted and is now heard finally.

Submissions of the Appellants:-

5. The learned counsel for the appellants submits, referring to the statement of opponent no.1 while lodging the FIR that the deceased was hired by opponent no.1 for short period to drive the vehicle to Rajasthan. It is her submission that opponent no.1 and the deceased are not relatives and also there is no dispute that the owner of the vehicle was opponent no.1. She submits that temporary hiring of a driver by opponent no.1 would constitute an employer-employee relationship between the deceased and opponent no.1. The learned counsel relied upon the contents of the FIR lodged by opponent no.1 to buttress her submissions.

6. In support of her above submissions, learned counsel for the appellants has relied upon following decisions :-

(i) Shahajahan & Anr. Vs. Shri Ram General Insurance Company Limited & Anr., (2022) 19 SCC 494

(ii) Bharti Axa General Insurance Co. Ltd., Nagpur Vs. Manohar Atmram Pardhi & Ors., 2020 SCC OnLine Bom 11790

(iii) New India Assurance Company Ltd. Vs. Mohan Kumar Sahoo & Anr., 2003 (4) L.L.N. 634

(iv) K. Saraswathi Vs. S. Narayanaswamy & Ors., 97 LW 418 .

Submissions of the Insurance Company:-

7. Per contra, learned counsel for opponent no.2-Insurance Company has vehemently opposed the appeal. It is his submission that the accident happened because of the negligence of the deceased and, therefore, they could not have got any compensation before the Motor Accident Claims Tribunal (MACT) and therefore, they have lodged this claim under the Employees' Compensation Act. The learned counsel further relied upon the evidence and the cross-examination of the witness of the applicant to draw the point that the applicants have failed to prove the relationship and the onus is on them before making any claim. He further submits that even in the applic

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